There are several key differences between the public and private sectors.
Firstly, the public sector comes under control of government, whereas the private sector is run by individuals and businesses who make a profit.
Because of the remit under which each sector falls under, there are several further differences between the two, including:
Those are the key differences between the public and private sectors which will have an impact on the types of contracts available and how the contractor will operate.
So, are there any other factors for contractors to consider when it comes to choosing between the public vs private sectors?
If you are a contractor it is likely that you’ve heard of IR35.
IR35 is a piece of legislation that came into force in 2007 to stop contractors from operating like employees but calling themselves contractors in order to pay less tax and National Insurance.
Changes to IR35 were implemented in 2017 when it became the responsibility of the client to determine the contractor’s IR35 status. However, this only applied to contractors operating in the public sector.
Following these changes, if the contractor was found to be inside IR35, it was the client that became responsible for deducting their tax and National Insurance contributions from the fee before it was paid to them.
Many of these public sector contractors were wrongly classified as being inside IR35, regardless of their circumstances, meaning many paid more in tax as a result.
Although these contractors had to pay more tax and National Insurance at the same levels as an employee, they did not receive the benefits of being employed.
Furthermore, from April 6th this year, the same rules have been rolled out to the private sector.
So, whereas prior to April 2021, many contractors avoided the public sector in order to avoid getting caught out by IR35, this is a factor that should no longer come into play when choosing between public vs private sectors.
There is, however, one way to avoid IR35 and be free to choose between public vs private sectors – by going umbrella.
For more information on IR35, check out our contractor’s guide to IR35 in 2021.
As an umbrella company employs the contractor, they are automatically exempt from IR35.
This takes away a lot of stress and means that the contractor can choose between the public or private sectors without worrying about getting caught out by IR35.
What’s more, there are several other benefits to operating under an umbrella company.
For example, umbrella contractors receive a range of statutory benefits including holiday pay, sick leave, a workplace pension and maternity/paternity leave.
Umbrella companies also take care of the business side of contracting, such as invoicing the client, chasing late payments, processing expenses and taking care of paperwork and admin.
What’s more, as the contractor is employed by the umbrella company they are paid a salary, meaning their tax is processed and deducted through the PAYE system.
If you have decided that umbrella is the best option for you in light of newly introduced IR35 reforms, Umbrella Supermarket are here to help you find the best umbrella company for your needs.
Our handy umbrella calculator takes just 60 seconds to use. Simply input your details, such as your name, contact information and your contractor daily rate and preferences, and our umbrella calculator will generate a list of the best suited umbrella companies for you.
Whether you are looking to operate in the public sector of the private sector, we can help you find an umbrella company that works for you, to help make contracting that little bit easier.
Any contractor considering switching to an umbrella company will want to know how to find the best provider to work with.
Although you could spend your precious time and energy searching the web for the best umbrella company, there is an easier way – using an umbrella calculator.
In this guide, Umbrella Supermarket explains why every contractor should use an umbrella calculator in 2021.
If you are considering contracting you will need to decide on PAYE or umbrella.
It can be a difficult decision to make and contractors will inevitably be questioning which option will be the best for them.
To help every contractor get on the right track for them, in this guide Umbrella Supermarket looks at PAYE vs umbrella, outlining the key differences and how this will impact you.
There are many reasons that contractors across the UK opt to work under an umbrella company.
Umbrella companies offer an easy way to contract and remove the need for the contractors to worry about the burdens of admin, finances, tax and IR35, all things that limited company contractors have to deal with.
For this reason, many contractors will be weighing up their options and questioning whether it is worth using an umbrella company in 2021. To help make the decision that little bit easier, Umbrella Supermarket has put together this guide on the pros and cons of using an umbrella company.
Any contractor that is considering operating through an umbrella company in 2021 will need to understand Umbrella Company fees - from why an umbrella company charges fees, how they are paid to how much the contractor will pay.
In this guide, Umbrella Supermarket answers those all-important questions to help every contractor know exactly where they stand when it comes to umbrella company fees.
If you’ve made the decision to contract through an umbrella company in 2021, you will next need to find an umbrella company that’s right for you.
After all, there are lots of umbrella companies out there, so how do you know which one to choose?
To help you find the best umbrella company for you, in this guide Umbrella Supermarket outlines what makes a good umbrella company, so you can rest assured you’re making the right move.
One of the many advantages to operating through an umbrella company for contractors is that they become an employee of their chosen provider.
In turn, this means that the contractor will be automatically enrolled onto the umbrella company’s workplace pension scheme.
To help contractors find out more about umbrella company pensions Umbrella Supermarket has put together this handy guide.
If you are considering contracting through an umbrella company you will naturally have questions and queries over how they work.
After all, making the move to umbrella can be a big step for contractors. To help, in this guide Umbrella Supermarket explains how to get started with an umbrella company and share our top tips for using one in 2021.
PAYE or umbrella is a question asked by every contractor. Which one you opt for will have a big impact on your contracting career and lifestyle. So, it's important to make the right decision for you.
To help makes things a little bit easier, Umbrella Supermarket has put together this guide on PAYE or umbrella, outlining the key differences between each, to help you make the best and most informed decision for you.
One of the many benefits to working through an umbrella company is that you will receive holiday pay as well as a range of other statutory benefits including sick pay, maternity and paternity pay.
To find out more about umbrella company holiday pay, and how to calculate how much you will be entitled to, Umbrella Supermarket has put together this handy guide.
Contractors must make several decisions throughout their contracting careers. One big decision contractors have to make is how they will operate.
One way that contractors can work is through an umbrella company.
Umbrella companies have become an increasingly popular way to contract in the past few years, offering many benefits to the contractor. But, how do you know whether this option is right for you?
To help every contractor make the right decision for them, in this guide, Umbrella Supermarket explains when not to use an umbrella company.
There are tons of benefits to using an umbrella company, which is why they have become such a popular option for contractors in recent years.
After all, an umbrella company takes away the stress and hassle of operating through a limited company whilst offering contractors a range of advantages, such as statutory rights, paying them a salary, deducting correct tax levels and National Insurance, and taking care of tasks like expense processing and invoicing.
However, as more and more contractors opt to use the services of an umbrella company, more providers have started to claim that they are HMRC approved.
To bust the myths around HMRC approved umbrella companies and get straight to the facts, in today's guide Umbrella Supermarket look at whether HMRC approved umbrella companies really exist, so you know exactly where you stand.
If you're considering making the leap to contracting, you will understandably want to know how much you will have to pay in umbrella company costs. After all, this amount comes directly out of the contractor’s pocket, so it’s important to be clued up on how much you should expect to pay.
To help contractors, in this guide Umbrella Supermarket answer the all-important question of how umbrella companies cost in 2021.
